Parson, Kelly reiterate support for cease in ‘border wars’ while still promoting ‘competition’

By Kaitlyn Schallhorn on August 13, 2019

KANSAS CITY, Kan. — Missouri Gov. Mike Parson and Kansas Gov. Laura Kelly reiterated their support for a cease in the “border wars” — the practice of using tax incentives to move businesses across state lines — in a summit Tuesday morning.

The bipartisan duo signed a ceremonial agreement at the joint meeting in Kansas. Parson, a Republican, has said the incentives were estimated to be about $330 million in the last decade.

“By signing this Memorandum of Understanding, Kansas [Gov. Laura Kelly] and I have officially ended the Kansas City Border War,” Parson said in a tweet. “Incentivizing companies to move a few miles doesn’t result in new jobs. We are realigning our economic development investments to better serve our taxpayers.”

He said other states and Washington, D.C., should take example from their bipartisan coming together.

Parson signed SB 182, championed by Republican state Sen. Mike Cierpiot, into law in June, eliminating tax incentives for businesses relocating to Missouri from certain counties in Kansas. It was triggered by an executive order from Kelly, a Democrat, that directed the Kansas Department of Commerce to no longer provide incentives to businesses in the Kansas City region for only moving employees across state lines.

“All governors have a responsibility to grow their economies and bring new, good-paying jobs into their states. Naturally, competition between states can arise in that process,” Kelly previously said. “Unfortunately, Kansas and Missouri allowed that healthy competition for new jobs and business development to spiral into something else that did not support the goal of new job creation.”

Kelly said Tuesday the two states still plan to “compete” but with “strategies that are sensible, cost-effective, and productive for people in both states.”

“That’s how healthy rivalries should work,” she said.

The signed agreement says both governors will “limit” incentives only to businesses that net new jobs during a relocation and allows for each state to rescind the agreement in the future — among other things.

The move garnered bipartisan support and was widely applauded Tuesday.

“I remember canvassing in 2014 and meeting someone whose job moved across state line. Not only was she inconvenienced, she understood the war was wasteful, futile. Glad to see progress made today and hopeful we can grow as a region,” Missouri state Sen. Lauren Arthur, a Democrat, said in a tweet.

“Proud to be a co-sponsor of the Senate bill that puts an end to the destructive use of taxpayer resources to entice companies across the [Missouri-Kansas border] in a way that doesn’t add to the economic development of either state,” Missouri state Sen. Tony Luetkemeyer, a Republican, said on social media.

Missouri’s legislation removed certain tax credits from businesses located in “border counties” that move across state lines to specific places in Missouri. It was dependant on actions taken by Kansas.

Cierpiot previously said the bill was needed because some companies along the Missouri-Kansas border “take advantage” of the economic policies of both states and move across state lines “without bringing the benefit of most companies when they come in here or grow here.”

“We have a lot of economic development policies and incentives trying to get companies to either grow here or move here,” he said.

Of the businesses moving across state lines, Cierpiot said: “So it’s not really generating new jobs per se and what goes with that normally like buying homes and all the economic activity that accompanies that.”

Kelly and Parson met Tuesday morning in Kansas City, Kansas, surrounded by elected officials, reporters, and business leaders.

Kaitlyn Schallhorn is a reporter with The Missouri Times. She joined the newspaper in March 2019 after working as a reporter for Fox News in New York City. Throughout her career, Kaitlyn has covered political campaigns across the U.S. and humanitarian aid efforts in Africa. She is a native of Missouri who studied journalism at Winthrop University in South Carolina. Contact Kaitlyn at kaitlyn@themissouritimes.com.